Public Sector Governance and Accountability Series: Budgeting and ...

518 Alta Fölscher
making recommendations to the cabinet. After the cabinet has approved
the new MTEF allocations, allocation letters are sent to all departments
informing them of their ceilings and triggering the final part of the budget
process, when departments prepare their budget documentation for submission
to the National Treasury and the National Treasury prepares the
Budget Review, Estimates of National Expenditure, and other components
for tabling on budget day.
Other structures through which political involvement in the budget
process is secured are the Budget Council, the Budget Forum, and intergovernmental
committees of sectoral ministers. Where the program is
known to affect provincial or local expenditure (or expenditure pressures
are known to arise at these levels), the fiscal implications will also be discussed
in the Budget Council and the Budget Forum, and consensus on key
tradeoffs will be sought. At a sectoral level, committees of national sector
ministers and their provincial counterparts discuss sector achievements,
policy priorities, and funding decisions that have provincial implications.
The national cabinet makes all the final decisions on consolidated
medium-term policy priorities and spending; these decisions include the
macro and fiscal framework, the division of revenue, the approval of the
MTBPS, and changes to the medium-term allocations to national votes and
provincial governments. An important event in supporting this decisionmaking
process is the cabinet’s periodic strategic planning lekgotla, at which
budget policy and planning uses are discussed. At the provincial level, discussion
on provincial policy priorities and the finalization of allocations to
provincial departments take place in the provincial executive councils.
Good budget documentation
The MTEF system in South Africa uses key sets of budget documentation to
extract strategic information for decision making, to ensure commitment to
decisions made, and to enable accountability. Changing the format of budget
documentation to achieve these objectives has been an important aspect of
the budget reform process.
The first public document in the budget process is the MTBPS, which is
tabled in Parliament at the end of October, approximately four months
before budget day. The MTBPS was also the first “new” document to emerge
(in 1997) from the budget reform process. This public document serves to
conclude the broad prioritization phase of the budget process and consolidates
the main budgeting ceilings. Thus, it signals the government’s fiscal and budget
policy intentions by providing information on the macroeconomic assumptions
and policy priorities driving the budget, the fiscal policy framework,